Canadian will be new King

The appointment of a former Canadian central banker as governor of the Bank of England is a good choice to lead the UK to better economic health, according to one of the country's most influential business groups.

The appointment of a former Canadian central banker as governor of the Bank of England is a good choice to lead the UK to better economic health, according to one of the country's most influential business groups.

CBI chief policy director Katja Hall said Chancellor George Osborne's decision to give Mark Carney the top job at Threadneedle Street should be welcomed.

"His strong track record as the Canadian central bank Governor and extensive experience in international financial regulation mean that he is well positioned to guide Britain through challenging economic times," she said.

Mr Carney (47), who had previously ruled himself out of contention for the job, will serve a fixed five-year term. The present Deputy Governor of the Bank, Paul Tucker, had been expected to be Sir Mervyn's successor.

"Mark Carney is the outstanding central banker of his generation," the Chancellor told the House of Commons in a statement. Mr Osborne added that Mr Carney would bring the "strong leadership and external experience the Bank needs".

The next Governor of the Bank will chair the Monetary Policy Committee, which sets interest rates, and also the Financial Policy Committee, which will be tasked with regulating the UK's financial sector from next year.

Mr Carney was selected by an interview panel that included the Permanent Secretary of the Treasury, Sir Nicholas Macpherson, and his deputies, John Kingman and Tom Scholar. Also on the panel was Sir David Lees, head of the Court of the Bank of England.

The news was greeted with shock in the Square Mile, where Mr Tucker was widely seen as the red-hot favourite. "Surprise, huge surprise," said Peter Dixon of Commerzbank. "That was the one guy I didn't have in the running."

Sir Mervyn welcomed the appointment. "He represents a new generation of leadership for the Bank of England, and is an outstanding choice to succeed me," he said in a statement.

Mr Carney, a banker at Goldman Sachs for 13 years, was made head of the Canadian central bank in 2008. He is also the chair of the G20's Financial Stability Board, which oversees the Basel rules on global bank capital levels.

The Chancellor said Mr Carney will apply for British citizenship. His wife and children already have joint British citizenship.